Lecture 11 Medical Benefits: Traditional Plans (Indemnity Plans)

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Lecture 11Medical BenefitsTraditional
Plans(Indemnity Plans)

• Providers of Traditional Coverage
• Blue Cross-Blue Shield
• Insurance Companies
• Basic Medical Expense Coverage
• Major Medical Coverage
• Managed Care Provisions in Traditional Plans
• Medical Savings Accounts

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Providers of Traditional Coverage

• Blue Cross-Blue Shield vs. Insurance Companies
• Regulation
• Taxation
• Form of benefits
• Types of benefits
• Reimbursement of providers
• National coverage
• Flexibility
• Rating
• Marketing

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Basic Medical Expense Coverage

• Traditional
• Hospital expense benefits
• In-patient
• Room and board
• Other charges
• Outpatient
• Surgery
• Preadmission testing
• Emergency room treatment
• Exclusions
• Surgical expense benefits
• Fee schedule
• Relative value schedule
• Reasonable and customary charges
• Physicians visits expense benefits
• In-hospital coverage
• Out-of-hospital coverage

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Basic Medical Expense Coverage - (cont.)

• Newer
• Extended care facilities
• Home health care
• Hospice care
• Ambulatory care
• Birthing centers
• Diagnostic x-ray and laboratory services
• Radiation therapy
• Prescription drug expense benefits
• Vision care
• Supplemental accident benefits

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Major Medical Coverage

• Types
• Supplemental
• Comprehensive
• Characteristics
• Covered expenses
• Exclusions
• Occupational injuries or diseases
• Cosmetic surgery
• Convalescent, custodial or rest care
• Limitations

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Major Medical CoverageCharacteristics - (cont.)

• Treatment of Mental Illness, Alcoholism and Drug
  Addiction
• Deductibles
• Coinsurance
• Maximum Benefits
• Annual
• Lifetime
• Per cause

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Managed Care Provisions in Traditional Plans

• Hospital certification
• Second surgical opinions
• Carve-outs for mental illness and substance abuse
  treatment
• Maternity management
• Pre-approval of visits to specialists

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Medical Savings Accounts

• Pilot program under Health Insurance Portability
  and Accountability Act
• Personal savings account for unreimbursed medical
  expenses
• Tax-exempt trust or custodial account
• Contributions are tax deductible
• Distributions for eligible expenses not taxable
• Other distributions taxed and penalized (15) if
  account holder is not 65, dead or disabled
• Strict regulations on contributions and eligible
  plans